Russia turns off the gas

Vladimir Putin has sent an ominous message to his neighbours, as the global balance of power shifts.

6:06PM GMT 01 Jan 2009

In cutting natural gas supplies to Ukraine, the Russians have invoked commercial considerations to cover a nakedly political act. Differences between the two sides include the price for 2009, the transit fee, settling a debt, and the role of a Swiss-registered intermediary. Moscow proposes a rise from $179.5 to $250 per 1,000 cubic metres. Kiev is offering $201 and wants a more-than-twofold increase in the transit fee for gas destined for other parts of Europe. The debt is a $450 million fine demanded by Russia for late payment.

At a time when oil prices have plunged and those for gas are due to follow suit, it might be expected that Russia would avoid scaring European clients by again turning off the taps to Ukraine. When it did so three years ago, it cast into doubt its reliability as a supplier. That fear will be compounded by its latest coup de main, even though it has assured the likes of Germany and Italy that deliveries will not be affected.

The repeat performance suggests two things. First, the Kremlin calculates that EU dependence on its gas – about 20 per cent of total supplies – will allow it to get away with bullying former parts of the Soviet Union. Second, its sights, after the humiliation of Georgia, are fixed on Ukraine, which is vulnerable to foreign meddling because of political divides between different regions of the country and between president and prime minister. The Russian-speaking populations of Donbass and Crimea and the future of the Russian naval base in Sevastopol could both serve as pretexts for greater interference.

As the Czechs assume the EU presidency and Washington prepares for Barack Obama, Vladimir Putin has signalled that, despite a contracting economy, he will maintain his drive to dominate the "near abroad". The West and Ukraine's bickering politicians have been warned.